John’s Blog

6-14-10

Dear Friends,

The economic news is that consumer personal spending increased 0.2% beating economist’s estimates of a 0.1% increase according to the Commerce Department. Personal incomes went up 0.4%.

The GDP was revised downward to 2.7% below a forecast of 3.0% annual growth in the economy.

Durable goods orders rose 0.9% when one takes away transport orders for commercial aircraft. When planes are added in the decline is 1.1%. An increase in durable goods converts to an increased use of transportation as there are more components and finished goods moving.

The Conference Board reported the consumer confidence fell to an index reading of 52.9% in June from a May reading of 62.7 which is a big drop. The concerns are that the economy is not improving and that there is a risk of further economic turmoil ahead including a double dipped recession.

In transportation however there seems to be a solid case for improvement with intermodal loadings reaching a 19 month high. Carloads increased 9% over the previous week as well.

In trucking, the ATA reported that tonnage rose 7.2% year to year in May for the sixth straight increase. Year over year readings when compared to the lows of 2009 can be impressive but the bad news is that tonnage dipped 0.6% in May from April. This is the first month to month decline since February but the overall trend line is moving upward.

Before everyone gets too worried about the direction of the freight industry consider that FedEx earned $419 million in the quarter on a 20% increase in revenue. Schneider National is hiring 2,000 more drivers. Class 8 truck sales increased 13.5% in May.

At Wagner we are seeing demand for trucks increasing while pricing is following the upward trend. We are engaged in a number of interesting projects from e-commerce fulfillment to plant materials support.

As we approach Independence Day, July 4^th, let us all be mindful of the sacrifices made by all members of our armed forces past and present. Our nation’s independence has been hard fought and it is good to remember on this special day.

Have a great week!

John Wagner Jr